STOCKS TUMBLE, BONDS RALLY: Here's What You Need To Know

Trading
resumed with a flourish in the S&P 500 pit at the Chicago
Mercantile Exchange, October 26, 1998.REUTERS/Sue Ogrocki

Stocks had a pretty nice sell-off today.

First, the scoreboard:

Dow: 16,108.8 (-231.1, -1.4%)

S&P 500: 1,846.3 (-21.8, -1.1%)

Nasdaq: 4,260.4 (-62.9, -1.4%)

And now the top stories:

Today's market-moving news arguably started to pour out
overnight in Asia where
China's latest stats on industrial production, retail
sales, and fixed asset investment all fell short of
expectations. Combined with last weekend's horrific plunge in
exports, economists now see the slowdown in China more clearly,
and some
have already slashed their GDP growth forecasts. "New
leaders are now facing a critical test: whether they can
stabilise the economy, without significantly compromising the
progress of lowering debt risks," said Societe Generale's Wei
Yao. "We think that they will try to send clear easing signals
but continue to refrain from any big stimulus program. Cutting
the required reserve ratio is an option, but it is more a
gesture than for real impact."

Data out of the U.S. was mostly better than expected.
Retail sales climbed 0.3% in February, which was higher
than the 0.2% gain expected. Similarly, sales excluding autos
and gas climbed 0.3%. "As the rise in retail sales in February
didn’t get anywhere close to reversing all of the drop in the
previous two months, the unusually bad weather is still hurting
retailers," said Capital Economics' Paul Dales. "Looking ahead,
there is clearly scope for more of the demand pent up during
the past few months to be released."

Initial
weekly jobless claims fell to 315,000, which was much better
than the 330,000 expected by economists. The 4-week moving
average fell to 330,500 from 336,750 last week. "Claims data have
been volatile dating back to last fall, as factors such as
computer system upgrades, seasonal adjustments related to moving
holidays, and severe weather all potentially complicated the
interpretation of the previously steady downward trend," said
Barclays' Cooper Howes. "That being said, the 4wma has settled in
around where it was last summer before these factors came into
play, suggesting that it may be stabilizing."

It was hours after the economic data was released that we
saw risk assets like stocks begin to fall and safe assets like
Treasury securities start to rise. "The ignition of the
Russia/Ukraine situation has created the bid," said
Tom Tucci, head of U.S. Treasury trading at CIBC World
Markets, in an emailed note to clients shortly after noon.
"Massive short covering in the last hour after yesterday's real
money buying." The 10-year Treasury
yield fell 9 basis points to 2.64%.